Study: City Could Have Saved More; A Financial Analysis Points to $237 Million Pension Deal Missed out On

Article excerpt

Byline: David Bauerlein

The proposed pension reform deal struck by Mayor Alvin Brown could have netted an additional $237 million in savings by reducing cost-of-living adjustments for current police and firefighters, according to an analysis by Pew Charitable Trusts.

But a raft of other changes would still generate "substantial long-term savings" for the city, according to the analysis.

Pew, which worked closely with a high-profile pension reform task force that issued a report in March, said Brown's proposal "contains the vast majority of the task force's recommendations and offers a comprehensive solution to Jacksonville's public safety pensions."

The Mayor's Office called attention to that conclusion, saying it bolsters the case for City Council approving the proposed pension reform deal.

"Don't take our word for it," said Chris Hand, chief of staff for Brown. "Take Pew's word for it. ... What we've been saying about this agreement, Pew has those same conclusions in their analysis of the agreement."

But Pew's report will generate discussion among City Council members because the analysis offers the first assessment of the total savings the city could reap from scaling back cost-of-living increases on pension benefits earned by active police and firefighters.

"That's a big number," City Councilman John Crescimbeni said Tuesday. "I'd consider that worth talking about."

Even without those savings, the proposed agreement would still save $1.54 billion over 30 years, according to the Pew analysis. That amounts to 87 percent of the savings the city could have generated by enacting all of the task force recommendations, Pew senior researcher David Draine wrote in his analysis.

The bulk of the savings would come from reduced benefits for new police and firefighters hired after Oct. 1.

"Taking into account the changes from the original recommendations, this agreement represents substantial long-term savings to the city, achieves the new plan design recommended by the task force, commits Jacksonville to a disciplined funding approach, and includes virtually all of the governance recommendations," Draine wrote.

Jacksonville police and firefighters get guaranteed 3 percent cost-of-living adjustments on their pensions. The pension reform task force recommended changing the COLA for current police and firefighters so benefits earned after the new agreement takes effect would have a maximum 1. …